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04 April 2006
Empire Online Limited
EMPIRE ONLINE LIMITED MAIDEN PRELIMINARY RESULTS FOR YEAR ENDED 31 DECEMBER 2005
Empire Online Limited (the “Company” or “Empire Online”), a leading multi-channel online gaming and marketing services company, today announces its maiden preliminary results for the year ended 31 December 2005. OPERATING HIGHLIGHTS: · Successful acquisitions of Club Dice casino and bingo platforms and Noble Poker, the largest poker operator on the iPoker network · Final dividend of US6.8cents (3.9pence) per Ordinary Share · Successful listing on AIM market raising $222m in gross proceeds · Assignment of Empire Online's PartyGaming related 'skin' operations to PartyGaming for $250 million cash FINANCIAL HIGHLIGHTS: · Reported net gaming revenues up 102% to $97.4m (2004: $48.3m.) Reported profit after amortisation and non recurring charges before taxation up 57% to $41.2m (2004: $26.2m) · Pro forma* net gaming revenues up 61% to $105.2m (2004: $65.2m) · Pro forma* gross profit up 33% to $51.9m (2004: $38.9m) · Pro forma* profit before amortisation and non recurring charges up 33% to $50.1m (2004: $37.7m) · Active Real Money Players at the end of 2005 rose by 59% to 165,310 (2004: 104,177) Commenting on the results, Noam Lanir, CEO of Empire Online Limited, said: “2005 was an extremely busy year for Empire with our successful listing on the AIM market of the London Stock Exchange and our evolution from a marketing services provider to a successful online gaming platform. We are extremely pleased with the performance of the Company during the period, and are very encouraged with the growth in both our poker and casino offerings globally and in particular in geographical territories outside of the USA.
The Company added around 450 new real money sign ups per day in the first 4 weeks of March in the new financial year. The Board reiterates its confidence in achieving an EBITDA of $37m for the year to 31 December 2006.” *The pro-forma financial information has been prepared so as to provide comparable information for the transitional year of 2005 during which certain assets were acquired by the Group from Tradal Ltd, a related company incorporated in St. Vincent and the Grenadines. Further details are disclosed within this statement. There will be a financial_reports to analysts at 9.00am today at Citigate Dewe Rogerson, 3 London Wall Buildings, London EC2M 5SY. For further investor information please go to http://investors.ep.com/company_information.htm Empire Online Limited +44(0) 20 7638 9571 Noam Lanir, Chief Executive Officer Andrew Burns, Chief Financial Officer Andrew Burnett, Head of Mergers & Acquisitions Citigate Dewe Rogerson +44(0) 20 7638 9571 Chairman’s Statement I would like to welcome all shareholders and investors to Empire Online’s maiden preliminary results. This has been a big year of change for all at Empire Online and I would like to express my gratitude to Noam Lanir and the rest of the directors and staff for all of their efforts during this period. Noam has a great understanding of this sector and I believe that with his ongoing enthusiasm and experience the Company is extremely well placed to meet the challenges ahead. Following the settlement from PartyGaming, Empire Online is in a very strong position financially. The $250m received is currently on deposit and is available to finance the acquisition of complementary businesses that can be acquired at a sensible price. The sector is widely expected to go through a period of consolidation and the Company in uniquely placed to emerge as one of the key players in the industry. Opportunities for organic growth also remain strong and are being achieved with admirable geographic diversity. At the same time we have significant downside protection to the Company in the unlikely event of any disruption to our US business through any regulatory activities. Diluted earnings per share after amortisation and non recurring charges were US16.0cents per share for the year. The Board is pleased to recommend a final dividend of $20m which is US 6.8cents (3.9pence) per share. Subject to approval at the Company’s AGM, the Company anticipates that the final dividend will be paid in early June. Together with the interim dividend of $10m or US3.4cents (1.9pence) per share, this takes the dividends paid to shareholders since the IPO to $30m or US10.2cents (5.8pence) per share. The Board reiterates its intention to continue with a 50% dividend payout ratio going forward. The opportunities that lie ahead are excellent and the Board remains extremely confident about the future business and profitability of Empire Online. Lord Steinberg
Chairman Chief Executive’s Review 2005 has been a year of considerable change for the Company. We end the year in a strong and secure position with the last six months in particular seeing a remarkable transformation in the Company. At the time of our IPO in June we were principally a provider of marketing services to two of the largest online gaming companies in their respective fields: CasinoOnNet and PartyPoker. Now, we have an established and fast growing Licensed Gaming business which operates its own platforms (Club Dice and Noble Poker) and have $250m cash at our disposal to pursue acquisitions which will enable us to play a leading part in industry consolidation. Operating Review The twelve months to 31st December 2005 has seen further continued growth across all aspects and areas of the Company, albeit in a manner different to that anticipated at the time of the Company’s IPO in June 2005. The number of registered customers across the Group has risen over the course of the twelve months ending 31st December 2005, by 185,456 (2004: 121,257). Growth in our casino business has led to a total number of active players at the end of the year of 42,304 (2004: 32,711). Total pro-forma revenues for the division were $31.4m (2004: $21.8m) for the year which generated a pro-forma gross profit of $16.6m (2004: $14.7m) for the year on a pro-forma gross profit margin of 51% (2004: 67%). In addition, growth in our poker business has led to a total number of active players at the end of the year of 123,006 (2004:71,466). Total pro-forma revenues for the division were $73.8m (2004: $43.3m) for the year which generated a pro-forma gross profit of $35.3m (2004: $24.3m) for the year on a pro-forma gross profit margin of 48% (2004: 56%). We have seen growth across Key Performance Indicators (KPI’s) at our Club Dice casino suite and our Noble Poker brand. Both of these platforms were acquired in August 2005, with the aim of reducing our reliance on our two technology providers at the time and to establish our move into licensed gaming, where we own and operate our own gaming license. This growth has been achieved along with a relentless focus on cost containment. The average cost of acquiring a new real money player across the group during 2005 was $230 (2004: $220). The Board believes that the stability of this metric, along with the Company’s ability to sustain a high level of player acquisition emphasises the deliverability of future incremental profits. Club Dice Casino Empire Online completed the acquisition of the Club Dice Casino suite in August. The cost of the acquisition was $46.6m. Club Dice has seen substantial growth in revenues and new sign ups since inception. At the end of 2005, the Club Dice platforms in aggregate had 26,790 active players. The net revenue per day averaged $79,946 during the fourth quarter (Q4) of 2005, compared to an average daily income of $65,334, an increase of 22.4% on the third quarter (Q3) of 2005.
Noble Poker Empire Online completed the acquisition of the player database, brand and intellectual property of Noble Poker in August 2005. Noble Poker is the largest poker operator on the Playtech iPoker network, one of the fastest growing poker networks on the internet. The cost of the acquisition was $3.6 million. The Company has implemented strategies to help drive the rate of growth in new daily signups. This has been successfully executed with Noble Poker achieving an average of 138 new real money signups per day during the fourth quarter of 2005 against 118 new real money player signups during the third quarter of 2005. The number of active players was 29,585 at the end of the fourth quarter of 2005, against 21,809 at the end of the third quarter. Industry Consolidation / Mergers and Acquisitions For many years, the industry has talked of consolidation. Now, we are starting to see that talk become reality. Empire Online has always seen its role at the centre of this consolidation, believing that our core expertise in marketing is better leveraged across a larger platform. The Company has always expressed its intention to pursue industry-consolidating deals as and when they become available. The large number of online gaming sites and the increasingly higher barriers to profitable scale mean that consolidation will be seen by many operators as an attractive exit going forward. I believe that the cash reserves available to the Company, along with the ability to use its equity give the Company considerable flexibility in pursuing merger and acquisition activity over the remainder of the year. Our focus is to extend the range of the products that we can offer our customers, including a sportsbook. We will assess areas of geographical acquisition in-line with regulatory and legislation trends. Industry Regulation Since the beginning of the year there has been renewed activity in the US Congress to bring forward bills that seek to either ban the use of financial instruments for online gaming or extend existing federal laws to prohibit US citizens from online gaming completely. Having established this Company in 1998, I am used to US regulatory threats as an ever present ‘soundtrack’ to the industry. I cannot offer investors any certainty that prohibitive legislation will not pass Congress, but as CEO of Empire Online, it is my duty to take all actions necessary to position this Company so that it maximises its exposure to the upside from this industry and minimises the risks. Our Mergers and Acquisitions function will seek to exploit, from a position of strength, any opportunities that may arise from adverse legislation being passed. Financial Review Pro-forma net gaming revenue for the year ended 31 December 2005 was $105.2m (12 months to December 2004: $65.2m), earning a pro-forma gross margin of $51.9m (2004: $39.0m) at 49.3% of turnover (2004: 59.8%). The reduction in pro-forma gross margin has arisen from additional marketing costs incurred in order to stabilise the EmpirePoker platform following the separation form PartyPoker on 8th October 2005. Additionally, significant offline campaigns were undertaken throughout 2005, which initially yield a lower gross margin than the Company’s main online marketing activities. Pro-forma profit before tax was $50.1m (2004: $37.7m), before amortization and non recurring costs of $4.5m (2004: nil.) Pro-forma diluted earnings per share before amortisation and non-recurring costs were 19cents (2004: $350). Pro-forma diluted earnings per share after amortisation and non-recurring costs were 17cents (2004: $350). During the year ended 31 December 2005, the Company generated pro-forma cash from operating activities of $77.2m (2004: $37.4m). As at 31 December 2005 the Company had $16.3m (2004: $21.8m) of cash and liquid resources on its balance sheet. Trading Outlook During the first 4 weeks of March in the new financial year the rate of new real money player growth was around 450 per day. The Company continues to believe that growth opportunities for all its platforms remain strong. In particular, the Company is pleased to note that more than 50% of new daily signups originate from outside of the USA. The cost of acquiring new customers continues to fall on a quarter by quarter basis. On the current rate of growth, the Company reiterates its confidence in achieving an EBITDA of $37 million for the current year. Noam Lanir Chief Executive Consolidated Income Statement for the year ended 31 December 2005 | | Note | Pre- amortisation and non recurring items 2005 | Amortisation and non recurring items 2005 | 2005 | 2004 | | | | $000 | $000 | $000 | $000 | | Net gaming revenue | | 97,389 | - | 97,389 | 48,319 | | | | | | | | | Cost of sales | | (49,644) | - | (49,644) | (20,716) | | | | –––––– | –––––– | –––––– | –––––– | | Gross profit | | 47,745 | - | 47,745 | 27,603 | | | | | | | | | Administrative expenses | 2 | (3,171) | (4,581) | (7,752) | (1,643) | | | | –––––– | –––––– | –––––– | –––––– | | Operating profit | 3 | 44,574 | (4,581) | 39,993 | 25,960 | | Finance expenditure | | (55) | - | (55) | (43) | | Finance income | | 1,246 | - | 1,246 | 309 | | | | –––––– | –––––– | –––––– | –––––– | | Profit before taxation | | 45,765 | (4,581) | 41,184 | 26,226 | | | | | | | | | Taxation | | (10) | - | (10) | - | | | | –––––– | –––––– | –––––– | –––––– | | Profit after taxation for the period | | 45,755 | (4,581) | 41,174 | 26,226 | | | | ––––––
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| | | | | | | | | | | | | | | | Earnings per share | | | | | | | Basic earnings per share ($) | 4 | $0.18 | | $0.16 | $ 243.85 | | | | ––––––
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| | Diluted earnings per share ($) | 4 | $0.17 | | $0.16 | $ 243.85 | | | | ––––––
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| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Dividends | | | | | | | | | | | | | | Proposed final dividend per share ($) | | | | $0.07 | - | | | | | | ––––––
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| | Proposed final dividend ($000) | | | | 20,000 | - | | | | | | ––––––
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| | Dividends paid during the period per share ($) | | | $0.10 | - | | | | | | ––––––
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| | Dividends paid during the period ($000) | | | | 49,043 | - | | | | | | ––––––
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| The notes on pages 10 to 11 form part of these financial statements. Consolidated Balance Sheet as at 31 December 2005 | | | | | | Note | 2005 | 2004 | | | | $000 | $000 | | Assets | | | | | Non-current assets | | | | | Property, plant and equipment | | 119 | - | | Intangible assets | | 224,628 | 794 | | | | –––––– | –––––– | | | | 224,747 | 794 | | | | –––––– | –––––– | | Current assets | | | | | Trade and other receivables | | 11,431 | 18,331 | | Cash and cash equivalents | 5 | 16,297 | 14,830 | | | | –––––– | –––––– | | | | 27,728 | 33,161 | | | | –––––– | –––––– | | Total assets | | 252,475 | 33,955 | | | | ––––––
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| | Equity | | | | | Share capital | | - | 1 | | Share premium | | 209,807 | 604 | | Share option reserve | | 277 | - | | Retained earnings | | 22,297 | 30,166 | | | | –––––– | –––––– | | Total equity | | 232,381 | 30,771 | | | | –––––– | –––––– | | Liabilities | | | | | Current liabilities | | | | | Trade and other payables | | 20,088 | 3,184 | | Current tax payable | | 6 | - | | | | –––––– | –––––– | | Total liabilities | | 20,094 | 3,184 | | | | –––––– | –––––– | | Total equity and liabilities | | 252,475 | 33,955 | | | | ––––––
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| These Financial Statements were approved by the Board of Directors on the 3rd of April 2006. The notes on pages 10 to 11 form part of these financial statements. Consolidated Statement of Changes in Equity for the year ended 31 December 2005 | | | Share capital | Share premium | Share Option reserve | Accumulated profits | Total | | | | $000 | $000 | $000 | $000 | $000 | | Balance at 1 January 2004 | | 1 | - | - | 3,940 | 3,941 | | | | | | | | | | Share capital issued | | - | 604 | - | - | 604 | | Net profit for the year | | - | - | - | 26,226 | 26,226 | | | | –––––– | –––––– | –––––– | –––––– | –––––– | | Balance at 31 December 2004 | | 1 | 604 | | 30,166 | 30,771 | | | | | | | | | | Net profit for the period | | - | - | - | 41,174 | 41,174 | | Issue of new share capital | | (1) | 222,601 | - | - | 222,600 | | IPO expenses | | - | (13,398) | - | - | (13,398) | | Share option reserve | | - | - | 277 | - | 277 | | Dividends paid | | - | - | - | (49,043) | (49,043) | | | | –––––– | –––––– | –––––– | –––––– | –––––– | | Balance at 31 December 2005 | | - | 209,807 | 277 | 22,297 | 232,381 | | | | ––––––
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| The notes on pages 10 to 11 form part of these financial statements. Consolidated Statement of Cash Flows for the year ended 31 December 2005 | | | Note | 2005 | 2004 | | | | | $000 | $000 | | Cash flows from operating activities | | | | | | Profit before tax | | | 41,184 | 26,226 | | | | | | | | Adjustments for | | | | | | Depreciation and amortisation | | | 2,898 | 173 | | Interest income | | | (1,159) | (309) | | Interest expense | | | 55 | - | | Equity settled share options | | | 277 | - | | | | | –––––– | –––––– | | | | | 43,255 | 26,090 | | | | | –––––– | –––––– | | Changes in working capital | | | | | | Decrease in trade and other receivables | | | 6,900 | 881 | | Increase/ (decrease) in trade and other payables | | | 16,904 | (2,109) | | Taxation paid | | | (4) | - | | | | | –––––– | –––––– | | | | | 23,800 | (1,228) | | | | | –––––– | –––––– | | Net cash generated from operating activities | | | 67,055 | 24,862 | | | | | –––––– | –––––– | | Cash flows from investing activities | | | | | | Purchase of property, plant and equipment | | | (131) | - | | Purchase of intangible assets | | | (5,528) | (967) | | Acquisition of business | | | (221,192) | - | | Interest income received | | | 1,159 | 309 | | | | | –––––– | –––––– | | Net cash used in investing activities | | | (225,692) | (658) | | | | | –––––– | –––––– | | Cash flows from financing activities | | | | | | Advance of loans to shareholders | | | - | (11,139) | | Dividends paid | | | (49,043) | - | | Proceeds from issue of shares | | | 209,203 | - | | Share capital cancellation | | | (1) | - | | Interest paid | | | (55) | - | | | | | –––––– | –––––– | | Net cash from/(used in) financing activities | | | 160,104 | (11,139) | | | | | –––––– | –––––– | | Net increase in cash and cash equivalents | | | 1,467 | 13,065 | | | | | | | | Cash and cash equivalents at the beginning of the year | | 5 | 14,830 | 1,765 | | | | | –––––– | –––––– | | Cash and cash equivalents at the end of the year | | 5 | 16,297 | 14,830 | | | | | ––––––
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| The notes on pages 10 to 11 form part of these financial statements. Notes to the Financial Statements | 1. | Basis of preparation | | | The audited financial statements of Empire Online have been prepared in accordance with International Financial Reporting Standards (“IFRS”) as adopted by the European Union. The significant accounting policies applied in the Financial Statements of the Group in the prior years have been applied consistently in these Financial Statements. The Group adopted for the first time IFRS 2 Share Based Payments and IFRS 3 Business Combinations in 2005. The adoption of the above had no impact on prior years. The financial information is presented in US dollars because that is the currency in which the Group primarily operates. | | | | | 2. | Amortisation and non recurring items | | Amortisation and non recurring items refer to: | 2. | | 2005 | 2004 | | | $000 | $000 | | | | | | Amortisation of intangible assets | 2,266 | - | | Amortisation of share options | 277 | - | | IPO related expenses | 587 | - | | Non recurring expenses | 1,451 | - | | | –––––– | –––––– | | | 4,581 | - | | | ––––––
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| 3. | | 2005 | 2004 | | | $000 | $000 | | Operating profit is stated after charging: | | | | | | | | Administration services | 936 | 1,460 | | Depreciation | 12 | 260 | | Amortisation | 2,886 | 173 | | Operating leases | 18 | - | | Auditors’ remuneration | 90 | 37 | | | ––––––
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| | | | | | Auditor’s remuneration is analysed as: | | | | Audit fees | 90 | 37 | | | ––––––
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| | | | | | | 4. | Earnings per share | | Basic earnings per share has been calculated by dividing the net profit attributable to ordinary shareholders (profit for the year) by the weighted average number of shares in issue during the relevant financial periods. Diluted earnings per share is calculated after taking into consideration the potentially diluted shares in existence as at the year ended 31 December 2005. For the year ended 31 December 2004 there were no potentially diluted shares. |
| | Pre- amortisation and non recurring items 2005 | Post amortisation and non recurring items 2005 | 2004 | | Net profit attributable to ordinary shareholders ($000) | 45,755 | 41,174 | 26,226 | | | –––––––––
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| | Weighted average number of ordinary shares in issue | 260,689,492 | 260,689,492 | 107,550 | | | –––––––––
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| | Basic earnings per share ($) | 0.18 | 0.16 | 243.85 | | | –––––––––
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| | Weighted average number of ordinary shares including the effect of potentially diluted shares | 261,862,570 | 261,862,570 | 107,550 | | | –––––––––
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| | Diluted earnings per share ($) | 0.17 | 0.16 | 243.85 | | | –––––––––
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| | | | | | | Number of Shares | | | | | Weighted average number of ordinary shares in issue | 260,689,492 | 260,689,492 | 107,550 | | Effect of dilutive potential ordinary shares: | | | | | Share options | 1,173,078 | 1,173,078 | - | | | –––––– | –––––– | –––––– | | Weighted average number of ordinary shares including the effect of potentially diluted shares | 261,862,570 | 261,862,570 | 107,550 | | | –––––––––
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| | 5. | Cash and cash equivalents | | Cash and cash equivalents included in the cash flow statement comprise the following at the balance sheet date: | | | 2005 | 2004 | | | $000 | $000 | | | | | | Short term deposits | 14,607 | 12,495 | | Cash at bank | 1,690 | 2,335 | | | –––––– | –––––– | | | 16,297 | 14,830 | | | ––––––
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| Unaudited Pro-Forma Financial Information General Information The pro-forma financial information has been prepared so as to provide comparable information for the transitional year
of 2005 during which certain assets were acquired by the Group from Tradal Ltd, a related company incorporated in
St. Vincent and the Grenadines. Tradal Ltd will continue to play an important role for the Group as some of the key members of staff are employed by
this Company. This Company charges a service fee for the services provided by its staff members. Balance Sheet The aggregated balance sheet as at 31 December 2005 is actually the same as the Group Balance Sheet as Tradal Ltd’s operations that related to the Group have, by the end of the year, been integrated into the group via the acquisition of Tradal Ltd’s assets. Basis of aggregation The pro-forma results of the Group are an aggregation based on Empire Online Group results for the year ended 31 December 2005 incorporating the trading results of the acquired business from Tradal Ltd for the first five months of 2005. These results were aggregated so as to provide comparable information. Unaudited pro-forma Income Statement for the year ended 31 December 2005 | | | Pre- amortisation and non recurring items 2005 | Amortisation and non recurring items 2005 | 2005 | 2004 | | | | $000 | $000 | $000 | $000 | | Net gaming revenue | | 105,181 | - | 105,181 | 65,186 | | | | | | | | | Cost of sales | | (53,244) | - | (53,244) | (26,192) | | | | –––––– | –––––– | –––––– | –––––– | | Gross profit | | 51,937 | - | 51,937 | 38,994 | | | | | | | | | Administrative expenses | | (3,249) | (4,581) | (7,830) | (1,827) | | | | –––––– | –––––– | –––––– | –––––– | | Operating profit | | 48,688 | (4,581) | 44,107 | 37,167 | | Net finance income | | 1,392 | - | 1,392 | 531 | | | | –––––– | –––––– | –––––– | –––––– | | Profit before taxation | | 50,080 | (4,581) | 45,499 | 37,698 | | | | | | | | | Taxation | | (22) | - | (22) | (16) | | | | –––––– | –––––– | –––––– | –––––– | | Profit after taxation for the period | | 50,058 | (4,581) | 45,477 | 37,682 | | | | ––––––
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| | | | | | | | | | | | | | | | Earnings per share | | | | | | | Basic earnings per share ($) | | $0.19 | | $0.17 | $350 | | | | ––––––
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| | Diluted earnings per share ($) | | $0.19 | | $0.17 | $350 | | | | ––––––
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| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Dividends | | | | | | | | | | | | | | Proposed dividend per share ($) | | | | $0.07 | - | | | | | | ––––––
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| | Proposed dividend ($000) | | | | 20,000 | - | | | | | | ––––––
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| | Dividends paid during the period per share ($) | | | | $0.10 | - | | | | | | ––––––
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| | Dividends paid during the period ($000) | | | | 49,043 | - | | | | | | ––––––
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| | | | | | | | | | | | | | | | Unaudited pro-forma Cash Flow Statement for the year ended 31 December 2005 | | | | 2005 | 2004 | | | | | $000 | $000 | | Cash flows from operating activities | | | | | | Profit before income tax | | | 45,499 | 37,698 | | | | | | | | Adjustments for | | | | | | Depreciation and amortisation | | | 2,928 | 317 | | Equity settled share options | | | 277 | - | | Interest income | | | (1,395) | (625) | | Interest expense | | | 90 | - | | Non cash item: aggregation adjustments | | | - | (3,384) | | | | | –––––– | –––––– | | | | | 47,399 | 34,006 | | | | | –––––– | –––––– | | Changes in working capital | | | | | | Decrease in trade and other receivables | | | 14,039 | 855 | | Increase in trade and other payables | | | 15,793 | 2,386 | | Taxation (paid)/received | | | (4) | 1 | | Decrease in trading investments | | | - | 104 | | | | | –––––– | –––––– | | | | | 29,828 | 3,346 | | | | | –––––– | –––––– | | Net cash generated from operating activities | | | 77,227 | 37,352 | | | | | –––––– | –––––– | | Cash flows from investing activities | | | | | | Purchase of property, plant and equipment | | | (131) | (152) | | Purchase of intangible assets | | | (5,558) | - | | Acquisition of business | | | (221,192) | (1,037) | | Elimination of Tradal Ltd assets and liabilities | | | 216 | - | | Interest income received | | | 1,395 | 627 | | | | | –––––– | –––––– | | Net cash used in investing activities | | | (225,270) | (562) | | | | | –––––– | –––––– | | Cash flows from financing activities | | | | | | Advance of loans to shareholders | | | - | (16,413) | | Dividends paid | | | (49,043) | (5,004) | | Proceeds from issue of shares | | | 209,203 | - | | Decrease in Capital Account | | | (18,010) | - | | Decrease in Treasury Shares | | | 445 | - | | Interest paid | | | (90) | - | | | | | –––––– | –––––– | | Net cash used in financing activities | | | 142,505 | (21,417) | | | | | –––––– | –––––– | | Net (decrease)/ increase in cash and cash equivalents | | | (5,538) | 15,373 | | | | | | | | Cash and cash equivalents at the beginning of the year | | | 21,835 | 6,462 | | | | | –––––– | –––––– | | Cash and cash equivalents at the end of the year | | | 16,297 | 21,835 | | | | | ––––––
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| The financial information of the Group set out above does not constitute statutory accounts. The results for the year ended 31 December 2005 are based on the audited annual report and consolidated financial statements of Empire Online Limited which have been reported on by the auditors. The report of the auditors was unqualified. Copies of the 2005 annual report and accounts will be sent to shareholders in due course.
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